Contract
THIS
NOTE
AND THE COMMON SHARES ISSUABLE UPON CONVERSION OF THIS NOTE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. THIS NOTE AND THE
COMMON SHARES ISSUABLE UPON CONVERSION OF THIS NOTE MAY NOT BE SOLD, OFFERED
FOR
SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION
STATEMENT AS TO THIS NOTE UNDER SAID ACT OR AN OPINION OF COUNSEL REASONABLY
SATISFACTORY TO COMPREHENSIVE HEALTHCARE SOLUTIONS, INC. THAT SUCH REGISTRATION
IS NOT REQUIRED.
FOR
VALUE
RECEIVED, COMPREHENSIVE HEALTHCARE SOLUTIONS, INC., a Delaware corporation
(hereinafter called "Borrower"), hereby promises to pay to Nite Capital, LP
(the
"Holder") or order, without demand, the sum of one hundred thousand ($100,000),
with simple interest accruing at the rate described below, on May 29, 2007
(the
"Maturity Date").
This
Note
has been entered into pursuant to the terms of a subscription agreement between
the Borrower and the Holder, dated of even date herewith (the "Subscription
Agreement"), and shall be governed by the terms of such Subscription Agreement.
Unless otherwise separately defined herein, all capitalized terms used in this
Note shall have the same meaning as is set forth in the Subscription Agreement.
The following terms shall apply to this Note:
ARTICLE
I
GENERAL
PROVISIONS
1.1
Interest Rate. Subject to Section 4.7 hereof, interest payable on this Note
shall accrue from the date hereof at a rate per annum (the "Interest Rate")
equal to five percent (5%), subject to adjustment pursuant to Section 1.2.
Interest on the principal amount outstanding shall be payable quarterly, in
arrears, commencing on March 1, 2006 and on the first day of each third calendar
month thereafter and on the Maturity Date, whether by acceleration or otherwise.
Interest shall be computed for actual days elapsed on the basis of a 360 day
year consisting of twelve 30-day months.
1.2
Payment Grace Period. From and after the 10th day after an Event of Default
under Section 3.1, the Interest Rate applicable to any unpaid amounts owed
hereunder shall be increased to sixteen percent (16%) per annum.
1.3
Conversion Privileges. The Conversion Privileges set forth in Article II shall
remain in full force and effect immediately from the date hereof and until
the
Note is paid in full regardless of the occurrence of an Event of Default. The
Note shall be payable in full on the Maturity Date, unless previously converted
into Common Stock in accordance with Article II hereof; provided, that if an
Event of Default has occurred, the Holder may elect to extend the Maturity
Date
by the amount of days of the pendency of the Event of Default.
ARTICLE
II
CONVERSION
RIGHTS
The
Holder shall have the right to convert the principal and accrued and unpaid
interest due under this Note into Shares of the Borrower's Common Stock, $.10
par value per share ("Common Stock") as set forth below.
2.1
Conversion into the Borrower's Common Stock.
(a)
The
Holder shall have the right from and after the date of the issuance of this
Note
and then at any time until this Note is fully paid, to convert any outstanding
and unpaid principal portion of this Note, and accrued interest, at the election
of the Holder (the date of giving of such notice of conversion being a
"Conversion Date") into fully paid and nonassessable shares of Common Stock
as
such stock exists on the date of issuance of this Note, or any shares of capital
stock of Borrower into which such Common Stock shall hereafter be changed or
reclassified, at the conversion price as defined in Section 2.1(b) hereof (the
"Conversion Price"), determined as provided herein. Upon delivery to the
Borrower of a completed Notice of Conversion, a form of which is annexed hereto,
Borrower shall issue and deliver to the Holder within five (5) business days
from the Conversion Date (such third day being the "Delivery Date") that number
of shares of Common Stock for the portion of the Note converted in accordance
with the foregoing. At the election of the Holder, the Borrower will deliver
accrued but unpaid interest on the principal amount of the Note being converted
in the manner provided in Section 1.1 through the Conversion Date directly
to
the Holder on or before the Delivery Date (as defined in the Subscription
Agreement). The number of shares of Common Stock to be issued upon each
conversion of this Note shall be determined by dividing that portion of the
principal of the Note and accrued interest to be converted, by the Conversion
Price.
(b)
Subject to adjustment as provided in Section 2.1(c) hereof, the Conversion
Price
per share shall be $.25.
(c)
The
Conversion Price and number and kind of shares or other securities to be issued
upon conversion determined pursuant to Section 2.1(a), shall be subject to
adjustment from time to time upon the happening of certain events while this
Note remains outstanding, as follows:
A.
Reorganization, Consolidation, Merger, etc. In case at any time or from time
to
time, the Company shall (a) effect a reorganization, (b) consolidate with or
merge into any other person or (c) transfer all or substantially all of its
properties or assets to any other person under any plan or arrangement
contemplating the dissolution of the Company, then, in each such case, as a
condition to the consummation of such a transaction, proper and adequate
provision shall be made by the Company whereby the Holder of this Note, on
the
conversion hereof as provided in Article II, at any time after the consummation
of such reorganization, consolidation or merger or the effective date of such
dissolution, as the case may be, shall receive, in lieu of the Common Stock
(or
Other Securities) issuable on such conversion prior to such consummation or
such
effective date, the stock and other securities and property (including cash)
to
which such Holder would have been entitled upon such consummation or in
connection with such dissolution, as the case may be, if such Holder had so
converted this Note, immediately prior thereto, all subject to further
adjustment thereafter as provided in Section 2.1(c)(E).
B.
Dissolution. In the event of any dissolution of the Company following the
transfer of all or substantially all of its properties or assets, the Company,
prior to such dissolution, shall at its expense deliver or cause to be delivered
the stock and other securities and property (including cash, where applicable)
receivable by the Holder of the Notes after the effective date of such
dissolution pursuant to this Article II to a bank or trust company (a "Trustee")
having its principal office in New York, NY, as trustee for the Holder of the
Notes.
C.
Continuation of Terms. Upon any reorganization, consolidation, merger or
transfer (and any dissolution following any transfer) referred to in this
Article II, this Note shall continue in full force and effect and the terms
hereof shall be applicable to the Other Securities and property receivable
on
the conversion of this Note after the consummation of such reorganization,
consolidation or merger or the effective date of dissolution following any
such
transfer, as the case may be, and shall be binding upon the issuer of any Other
Securities, including, in the case of any such transfer, the person acquiring
all or substantially all of the properties or assets of the Company, whether
or
not such person shall have expressly assumed the terms of this Note as provided
in Section 2.1(c)(E). In the event this Note does not continue in full force
and
effect after the consummation of the transaction described in this Article
II,
then only in such event will the Company's securities and property (including
cash, where applicable) receivable by the Holder of the Notes be delivered
to
the Trustee as contemplated by Section 2.1(c)(B).
D.
Share
Issuance. Until the Expiration Date, if the Company shall issue any Common
Stock
except for the Excepted Issuances (as defined in the Subscription Agreement),
prior to the complete conversion of this Note for a consideration less than
the
Purchase Price that would be in effect at the time of such issue, then, and
thereafter successively upon each such issue, the Purchase Price shall
automatically and with no action required by the Company or Holder, be reduced
to such other lower issue price. For purposes of this adjustment, the issuance
of any security or debt instrument of the Company carrying the right to convert
such security or debt instrument into Common Stock or of any Note, right or
option to purchase Common Stock shall result in an adjustment to the Purchase
Price upon the issuance of the above-described security, debt instrument, Note,
right, or option and again at any time upon any subsequent issuances of shares
of Common Stock upon conversion of such conversion or purchase rights if such
issuance is at a price lower than the Purchase Price in effect upon such
issuance. The reduction of the Purchase Price described in this Section Section
2.1(c)(D) is in addition to the other rights of the Holder described in the
Subscription Agreement.
E.
Extraordinary Events Regarding Common Stock. In the event that the Company
shall
(a) issue additional shares of the Common Stock as a dividend or other
distribution on outstanding Common Stock, (b) subdivide its outstanding shares
of Common Stock, or (c) combine its outstanding shares of the Common Stock
into
a smaller number of shares of the Common Stock, then, in each such event, the
Purchase Price shall, simultaneously with the happening of such event, be
adjusted by multiplying the then Purchase Price by a fraction, the numerator
of
which shall be the number of shares of Common Stock outstanding immediately
prior to such event and the denominator of which shall be the number of shares
of Common Stock outstanding immediately after such event, and the product so
obtained shall thereafter be the Purchase Price then in effect. The Purchase
Price, as so adjusted, shall be readjusted in the same manner upon the happening
of any successive event or events described herein in this Section 2.1(c)(E).
The number of shares of Common Stock that the Holder of this Note shall
thereafter, on the conversion hereof as provided in Article II, be entitled
to
receive shall be adjusted to a number determined by multiplying the number
of
shares of Common Stock that would otherwise (but for the provisions of this
Section 2.1(c)(E)) be issuable on such conversion by a fraction of which (a)
the
numerator is the Purchase Price that would otherwise (but for the provisions
of
this Section 2.1(c)(E)) be in effect, and (b) the denominator is the Purchase
Price in effect on the date of such conversion.
F.
Certificate as to Adjustments. In each case of any adjustment or readjustment
in
the shares of Common Stock (or Other Securities) issuable on the conversion
of
the Notes, the Company at its expense will promptly cause its Chief Financial
Officer or other appropriate designee to compute such adjustment or readjustment
in accordance with the terms of the Note and prepare a certificate setting
forth
such adjustment or readjustment and showing in detail the facts upon which
such
adjustment or readjustment is based, including a statement of (a) the
consideration received or receivable by the Company for any additional shares
of
Common Stock (or Other Securities) issued or sold or deemed to have been issued
or sold, (b) the number of shares of Common Stock (or Other Securities)
outstanding or deemed to be outstanding, and (c) the Purchase Price and the
number of shares of Common Stock to be received upon conversion of this Note,
in
effect immediately prior to such adjustment or readjustment and as adjusted
or
readjusted as provided in this Note. The Company will forthwith mail a copy
of
each such certificate to the Holder of the Note and any transfer agent of the
Company.
(d)
Whenever the Conversion Price is adjusted pursuant to Section 2.1(c) above,
the
Borrower shall promptly mail to the Holder a notice setting forth the Conversion
Price after such adjustment and setting forth a statement of the facts requiring
such adjustment.
2.2
Method of Conversion. This Note may be converted by the Holder in whole or
in
part as described in Section 2.1(a) hereof and the Subscription Agreement.
Upon
partial conversion of this Note, a new Note containing the same date and
provisions of this Note shall, at the request of the Holder, be issued by the
Borrower to the Holder for the principal balance of this Note and interest
which
shall not have been converted or paid.
2.3
Maximum Conversion.
(a)
Notwithstanding anything to the contrary contained herein, the number of shares
of Common Stock that may be acquired by the Subscriber upon conversion of the
Notes (or otherwise in respect hereof) shall be limited to the extent necessary
to insure that, following such conversion (or other issuance), the total number
of shares of Common Stock then beneficially owned by such Subscriber and its
affiliates and any other persons whose beneficial ownership of Common Stock
would be aggregated with the Subscriber's for purposes of Section 13(d) of
the
1934 Act, does not exceed 4.999% of the total number of issued and outstanding
shares of Common Stock (including for such purpose the shares of Common Stock
issuable upon such conversion). For such purposes, beneficial ownership shall
be
determined in accordance with Section 13(d) of the 1934 Act and the rules and
regulations promulgated thereunder. By written notice to the Company, a
Subscriber may waive the provisions of this Section 2.3(a) as to itself but
any
such waiver will not be effective until the 61st day after delivery thereof
and
such waiver shall have no effect on any other Investor.
(b)
Notwithstanding anything to the contrary contained herein, the number of shares
of Common Stock that may be acquired by the Subscriber upon conversion of the
Notes (or otherwise in respect hereof) shall be limited to the extent necessary
to insure that, following such conversion (or other issuance), the total number
of shares of Common Stock then beneficially owned by such Subscriber and its
affiliates and any other persons whose beneficial ownership of Common Stock
would be aggregated with the Subscriber's for purposes of Section 13(d) of
the
1934 Act, does not exceed 9.999% of the total number of issued and outstanding
shares of Common Stock (including for such purpose the shares of Common Stock
issuable upon such conversion). For such purposes, beneficial ownership shall
be
determined in accordance with Section 13(d) of the 1934 Act and the rules and
regulations promulgated thereunder. This provision may not be
waived.
2.4
Conversion of Note.
(a)
Upon
the conversion of a Note or part thereof, the Company shall, at its own cost
and
expense, take all necessary action, including obtaining and delivering, an
opinion of counsel to assure that the Company's transfer agent shall issue
stock
certificates in the name of Subscriber (or its nominee) or such other persons
as
designated by Subscriber and in such denominations to be specified at conversion
representing the number of shares of Common Stock issuable upon such conversion.
The Company warrants that no instructions other than these instructions have
been or will be given to the transfer agent of the Company's Common Stock and
that, unless waived by the Subscriber, the Shares will be free-trading, and
freely transferable, and will not contain a legend restricting the resale or
transferability of the Shares provided the Shares are being sold pursuant to
an
effective registration statement covering the Shares or are otherwise exempt
from registration.
(b)
Subscriber will give notice of its decision to exercise its right to convert
the
Note or part thereof by telecopying an executed and completed Notice of
Conversion (a form of which is annexed as Exhibit A to the Note) to the Company
via confirmed telecopier transmission and overnight courier or otherwise
pursuant to Section 4.2 of this Note. The Subscriber will not be required to
surrender the Note until the Note has been fully converted or satisfied. Each
date on which a Notice of Conversion is telecopied to the Company in accordance
with the provisions hereof shall be deemed a "Conversion Date." The Company
will
itself or cause the Company's transfer agent to transmit the Company's Common
Stock certificates representing the Shares issuable upon conversion of the
Note
to the Subscriber via express courier for receipt by such Subscriber within
five
(5) business days after receipt by the Company of the Notice of Conversion
(such
third day being the "Delivery Date"). In the event the Shares are electronically
transferable, then delivery of the Shares must be made by electronic transfer
provided request for such electronic transfer has been made by the Subscriber
and the Subscriber has complied with all applicable securities laws in
connection with the sale of the Common Stock, including, without limitation,
the
prospectus delivery requirements. A Note representing the balance of the Note
not so converted will be provided by the Company to the Subscriber if requested
by Subscriber, provided the Subscriber delivers the original Note to the
Company.
(c)
The
Company understands that a delay in the delivery of the Shares in the form
required pursuant to Section 2.4(a) hereof, or the Mandatory Redemption Amount
described in Section 2.5 hereof, respectively after the Delivery Date or the
Mandatory Redemption Payment Date (as hereinafter defined) could result in
economic loss to the Subscriber. As compensation to the Subscriber for such
loss, the Company agrees to pay (as liquidated damages and not as a penalty)
to
the Subscriber for late issuance of Shares in the form required pursuant to
Section 7.1 hereof upon Conversion of the Note in the amount of $20 per business
day after the Delivery Date for each $10,000 of Note principal amount being
converted of the corresponding Shares which are not timely delivered. The
Company shall pay any payments incurred under this Section in immediately
available funds upon demand. Furthermore, in addition to any other remedies
which may be available to the Subscriber, in the event that the Company fails
for any reason to effect delivery of the Shares by the Delivery Date or make
payment by the Mandatory Redemption Payment Date, the Subscriber will be
entitled to revoke all or part of the relevant Notice of Conversion or rescind
all or part of the notice of Mandatory Redemption by delivery of a notice to
such effect to the Company whereupon the Company and the Subscriber shall each
be restored to their respective positions immediately prior to the delivery
of
such notice, except that the liquidated damages described above shall be payable
through the date notice of revocation or rescission is given to the
Company.
(d)
Nothing contained herein or in any document referred to herein or delivered
in
connection herewith shall be deemed to establish or require the payment of
a
rate of interest or other charges in excess of the maximum permitted by
applicable law. In the event that the rate of interest or dividends required
to
be paid or other charges hereunder exceed the maximum permitted by such law,
any
payments in excess of such maximum shall be credited against amounts owed by
the
Company to the Subscriber and thus refunded to the Company.
2.5
Mandatory Redemption at Subscriber's Election. In the event the Company is
prohibited from issuing Shares, or fails to timely deliver Shares on a Delivery
Date, or upon the occurrence of any other Event of Default (as defined in the
Note or in this Agreement) or for any reason other than pursuant to the
limitations set forth in Section 2.3 hereof, then at the Subscriber's election,
the Company must pay to the Subscriber ten (10) business days after request
by
the Subscriber, at the Subscriber's election, a sum of money in immediately
available terms equal to the greater of (i) the product of the outstanding
principal amount of the Note designated by the Subscriber multiplied by 120%,
or
(ii) the product of the number of Shares otherwise deliverable upon conversion
of an amount of Note principal and/or interest designated by the Subscriber
(with the date of giving of such designation being a "Deemed Conversion Date")
at the then Conversion Price that would be in effect on the Deemed Conversion
Date multiplied by the average of the closing bid prices for the Common Stock
for the five consecutive trading days preceding either: (1) the date the Company
becomes obligated to pay the Mandatory Redemption Payment, or (2) the date
on
which the Mandatory Redemption Payment is made in full, whichever is greater,
together with accrued but unpaid interest thereon and any liquidated damages
then payable ("Mandatory Redemption Payment"). The Mandatory Redemption Payment
must be received by the Subscriber on the same date as the Company Shares
otherwise deliverable or within ten (10) business days after request, whichever
is sooner ("Mandatory Redemption Payment Date"). Upon receipt of the Mandatory
Redemption Payment, the corresponding Note principal and interest will be deemed
paid and no longer outstanding. Liquidated damages calculated pursuant to
Section 2.4(c) hereof, that have been paid or accrued for the twenty day period
prior to the actual receipt of the Mandatory Redemption Payment by the
Subscriber shall be credited against the Mandatory Redemption
Payment.
2.6
Injunction Posting of Bond. In the event a Subscriber shall elect to convert
a
Note or part thereof or exercise the Warrant in whole or in part, the Company
may not refuse conversion or exercise based on any claim that such Subscriber
or
any one associated or affiliated with such Subscriber has been engaged in any
violation of law, or for any other reason, unless, an injunction from a court,
on notice, restraining and or enjoining conversion of all or part of such Note
or exercise of all or part of such Warrant shall have been sought and obtained
by the Company and the Company has posted a surety bond for the benefit of
such
Subscriber in the amount of 120% of the amount of the Note, or aggregate
purchase price of the Warrant Shares which are sought to be subject to the
injunction, which bond shall remain in effect until the completion of
arbitration/litigation of the dispute and the proceeds of which shall be payable
to such Subscriber to the extent Subscriber obtains judgment.
2.7
Buy-In. In addition to any other rights available to the Subscriber, if the
Company fails to deliver to the Subscriber such shares issuable upon conversion
of a Note by the Delivery Date and if after five (5) business days after the
Delivery Date the Subscriber purchases (in an open market transaction or
otherwise) shares of Common Stock to deliver in satisfaction of a sale by such
Subscriber of the Common Stock which the Subscriber was entitled to receive
upon
such conversion (a "Buy-In"), then the Company shall pay in cash to the
Subscriber (in addition to any remedies available to or elected by the
Subscriber) the amount by which (A) the Subscriber's total purchase price
(including brokerage commissions, if any) for the shares of Common Stock so
purchased exceeds (B) the aggregate principal and/or interest amount of the
Note
for which such conversion was not timely honored, together with interest thereon
at a rate of 15% per annum, accruing until such amount and any accrued interest
thereon is paid in full (which amount shall be paid as liquidated damages and
not as a penalty). For example, if the Subscriber purchases shares of Common
Stock having a total purchase price of $11,000 to cover a Buy-In with respect
to
an attempted conversion of $10,000 of note principal and/or interest, the
Company shall be required to pay the Subscriber $1,000, plus interest. The
Subscriber shall provide the Company written notice indicating the amounts
payable to the Subscriber in respect of the Buy-In.
2.8
Optional Redemption.
(a)
Provided that the Company has a number of authorized but unissued shares of
Common Stock sufficient for the issuance of all Shares underlying the remaining
principal amount of this Note, such Common Stock is listed or quoted (and is
not
suspended from trading) on a trading market and such shares of Common Stock
are
approved for listing on such trading market upon issuance, such Common Stock
is
registered for resale under the
Registration
Statement and the prospectus under such Registration Statement is available
for
the sale of all Registrable Securities held by the Subscriber, such issuance
would be permitted in full without violating Section 2.3 herein or the rules
or
regulations of any trading market on which such Common Stock may be listed
or
quoted, and both immediately before and after giving effect thereto, no Event
of
Default under the Subscription Agreement or this Note shall or would exist,
the
Borrower will have the option of prepaying the outstanding principal amount
of
this Note ("Optional Redemption"), in whole or in part, together with interest
accrued thereon, by paying to the Holder a sum of money equal to one hundred
twenty five percent (125%) of the principal amount to be redeemed, together
with
accrued but unpaid interest thereon and interest that will accrue until the
actual repayment date and any and all other sums due, accrued or payable
to the
Holder arising under the Note, the Subscription Agreement or any Transaction
Document (the "Redemption Amount") on the day written notice of redemption
(the
"Notice of Redemption") is given to the Holder. The Notice of Redemption
shall
specify the date for such Optional Redemption (the "Redemption Payment Date"),
which date shall be not less than five (5) business days after the date of
the
Notice of Redemption (the "Redemption Period"). A Notice of Redemption shall
not
be effective with respect to any portion of the Note for which the Holder
has a
pending election to convert, or for Conversion Notices given by the Holder
prior
to the Redemption Payment Date. During a Redemption Period occurring after
the
Actual Effective Date, the Holder may deliver Notices of Conversion for up
to
100% of the initial principal amount of the Note and accrued interest. On
the
Redemption Payment Date, the Redemption Amount shall be paid in good funds
to
the Holder. In the event the Borrower fails to pay the Redemption Amount
on the
Redemption Payment Date as set forth herein, then (i) such Notice of Redemption
will be null and void, (ii) Borrower will have no further right to deliver
another Notice of Redemption, and (iii) Borrower's failure may be deemed
by
Holder to be a non-curable Event of Default.
(b)
A
Notice of Redemption must be given proportionately to all Holders of Notes
bearing similar terms to this Note issued on the date of this Note.
2.9
Reservation. During the period the conversion right exists, Borrower will
reserve from its authorized and unissued Common Stock a number of shares of
Common Stock equal to 175% of the amount of Common Stock issuable upon the
full
conversion of this Note. Borrower represents that upon issuance, such shares
will be duly and validly issued, fully paid and non-assessable. Xxxxxxxx agrees
that its issuance of this Note shall constitute full authority to its officers,
agents, and transfer agents who are charged with the duty of executing and
issuing stock certificates to execute and issue the necessary certificates
for
shares of Common Stock upon the conversion of this Note.
ARTICLE
III
EVENTS
OF
DEFAULT
The
occurrence of any of the following events of default ("Event of Default") shall,
at the option of the Holder hereof, make all sums of principal and interest
then
remaining unpaid hereon and all other amounts payable hereunder immediately
due
and payable, upon demand, without presentment, or grace period, all of which
hereby are expressly waived, except as set forth below:
3.1
Failure to Pay Principal or Interest. The Borrower fails to pay any installment
of principal, interest or other sum due under this Note when due.
3.2
Breach of Covenant. The Borrower breaches any other covenant or other term
or
condition of the Subscription Agreement or this Note in any material respect
and
such breach, if subject to cure, continues for a period of ten (10) business
days after written notice to the Borrower from the Holder.
3.3
Breach of Representations and Warranties. Any representation or warranty of
the
Borrower made herein, in the Subscription Agreement, or in any agreement,
statement or certificate given in writing pursuant hereto or in connection
therewith shall be false or misleading in any material respect as of the date
made and the Closing Date.
3.4
Receiver or Trustee. The Borrower shall make an assignment for the benefit
of
creditors, or apply for or consent to the appointment of a receiver or trustee
for it or for a substantial part of its property or business; or such a receiver
or trustee shall otherwise be appointed.
3.5
Judgments. Any money judgment, writ or similar final process shall be entered
or
filed against Borrower or any of its property or other assets for more than
$100,000, and shall remain unvacated, unbonded or unstayed for a period of
forty-five (45) days.
3.6
Bankruptcy. Bankruptcy, insolvency, reorganization or liquidation proceedings
or
other proceedings or relief under any bankruptcy law or any law, or the issuance
of any notice in relation to such event, for the relief of debtors shall be
instituted by or against the Borrower and if instituted against Borrower are
not
dismissed within 45 days of initiation.
3.7
Delisting. Delisting of the Common Stock from the OTC Bulletin Board ("Bulletin
Board") or such other principal exchange on which the Common Stock is listed
for
trading; failure to comply with the requirements for continued listing on the
Bulletin Board for a period of three consecutive trading days; or notification
from the Bulletin Board or any Principal Market that the Borrower is not in
compliance with the conditions for such continued listing on the Bulletin Board
or other Principal Market.
3.8
Non-Payment. A default by the Borrower under any one or more obligations in
an
aggregate monetary amount in excess of $100,000 for more than twenty days after
the due date.
3.9
Stop
Trade. An SEC or judicial stop trade order or Principal Market trading
suspension that lasts for five or more consecutive trading days.
3.10
Failure to Deliver Common Stock or Replacement Note. Xxxxxxxx's failure to
timely deliver Common Stock to the Holder pursuant to and in the time required
by this Note and Sections 7 and 11 of the Subscription Agreement, or, if
required, a replacement Note.
3.11
Non-Registration Event. The occurrence of a Non-Registration Event as described
in Section 11.4 of the Subscription Agreement.
3.12
Reverse Splits. The Borrower effectuates a reverse split of its Common Stock
without the prior written consent of the Holder.
3.13
Reservation Default. Failure by the Borrower to have reserve for issuance upon
conversion of the Note the amount of Common stock as set forth in the
Subscription Agreement.
3.14
Cross Default. A default by the Borrower of a material term, covenant, warranty
or undertaking of any other agreement to which the Borrower and Holder are
parties, or the occurrence of a material event of default under any such other
agreement which is not cured after any required notice and/or cure
period.
3.15
Change in Control. A change in control of the Company without the written
consent of the Holder. A change in control shall mean that more than 30% of
the
shares of common stock are consolidated in one person or entity so that the
person or entity may control the election of the board of directors or the
passage of a proposal that would normally require a shareholder vote without
such shareholder vote and that such person or entity was not a holder of shares
of the Company at the date of execution hereof.
3.16
Entity Restrictions. The Company shall neither conduct nor permit to occur
any
reclassification, business combination, spin-off, merger, reorganization, stock
sale or other transaction that results in the transfer, sale or distribution
(by
operation of law or otherwise) of the Company or any subsidiary's stock, or
any
other action reasonably related thereto.
3.17
Asset Sales. Neither the Company will, nor will the Company permit any of its
or
its subsidiaries to, sell, transfer, lease or otherwise dispose (including
pursuant to a merger) of substantially all of the Company's assets, including
any asset constituting an equity interest in any other person, except sales,
transfers, leases and other dispositions of inventory, used, obsolete or surplus
equipment or other property, in each case in the ordinary course of the
Company's business and consistent with past practice.
ARTICLE
IV
MISCELLANEOUS
4.1
Failure or Indulgence Not Waiver. No failure or delay on the part of Holder
hereof in the exercise of any power, right or privilege hereunder shall operate
as a waiver thereof, nor shall any single or partial exercise of any such power,
right or privilege preclude other or further exercise thereof or of any other
right, power or privilege. All rights and remedies existing hereunder are
cumulative to, and not exclusive of, any rights or remedies otherwise
available.
4.2
Notices. All notices, demands, requests, consents, approvals, and other
communications required or permitted hereunder shall be in writing and, unless
otherwise specified herein, shall be (i) personally served, (ii) deposited
in
the mail, registered or certified, return receipt requested, postage prepaid,
(iii) delivered by reputable air courier service with charges prepaid, or (iv)
transmitted by hand delivery, telegram, or facsimile, addressed as set forth
below or to such other address as such party shall have specified most recently
by written notice. Any notice or other communication required or permitted
to be
given hereunder shall be deemed effective (a) upon hand delivery or delivery
by
facsimile, with accurate confirmation generated by the transmitting facsimile
machine, at the address or number designated below (if delivered on a business
day during normal business hours where such notice is to be received), or the
first business day following such delivery (if delivered other than on a
business day during normal business hours where such notice is to be received)
or (b) on the second business day following the date of mailing by express
courier service, fully prepaid, addressed to such address, or upon actual
receipt of such mailing, whichever shall first occur. The addresses for such
communications shall be: (i) (i) if to the Company, to: Comprehensive Healthcare
Solutions, Inc., 00 Xxxxxx Xxxxxx, Xxxxx 000, Xxxxxxx, XX 00000, Attn: Xxxx
Xxxxxxx, CEO, telecopier number: (000) 000-0000, with a copy by telecopier
only
to: Xxxxxx & Xxxxxx, LLP, 000 Xxxxx 0 Xxxxx, Xxxxx 000, Xxxxxxxxx, XX 00000,
telecopier number: (000) 000-0000, and (ii) if to the Holder, to the name,
address and telecopy number set forth on the front page of this Note, with
a
copy by telecopier only to (not with respect to Conversion Notices): Xxxxx
&
Associates., Xxxxx Xxxxx, 00 Xxxxxxxx, Xxxxx 0000 Xxx Xxxx XX 00000, telecopier
number: (000) 000-0000.
4.3
Amendment Provision. The term "Note" and all reference thereto, as used
throughout this instrument, shall mean this instrument as originally executed,
or if later amended or supplemented, then as so amended or
supplemented.
4.4
Assignability. This Note shall be binding upon the Borrower and its successors
and assigns, and shall inure to the benefit of the Holder and its successors
and
assigns.
4.5
Cost
of Collection. If default is made in the payment of this Note, Borrower shall
pay the Holder hereof reasonable costs of collection, including reasonable
attorneys' fees.
4.6
Governing Law. This Note shall be governed by and construed in accordance with
the laws of the State of New York. Any action brought by either party against
the other concerning the transactions contemplated by this Agreement shall
be
brought only in the state courts of New York or in the federal courts located
in
the state of New York. Both parties and the individual signing this Agreement
on
behalf of the Borrower agree to submit to the jurisdiction of such courts.
The
prevailing party shall be entitled to recover from the other party its
reasonable attorney's fees and costs.
4.7
Maximum Payments. Nothing contained herein shall be deemed to establish or
require the payment of a rate of interest or other charges in excess of the
maximum permitted by applicable law. In the event that the rate of interest
required to be paid or other charges hereunder exceed the maximum permitted
by
such law, any payments in excess of such maximum shall be credited against
amounts owed by the Borrower to the Holder and thus refunded to the
Borrower.
4.8
Late
Payments. Subject to Section 4.7 hereof, the interest rate applicable to any
late, unpaid amounts owed hereunder or under any Transaction Document shall
be
sixteen percent (16%) per annum.
4.9
Redemption. This Note may not be redeemed or paid without the consent of the
Holder except as described in this Note or in the Subscription
Agreement.
4.10
Shareholder Status. The Holder shall not have rights as a shareholder of the
Borrower with respect to unconverted portions of this Note. However, the Holder
will have all the rights of a shareholder of the Borrower with respect to the
shares of Common Stock to be received by Holder after delivery by the Holder
of
a Conversion Notice to the Borrower.
[REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK
SIGNATURE
PAGE FOLLOWS]
IN
WITNESS WHEREOF, Xxxxxxxx has caused this Note to be signed in its name by
an
authorized
officer as of the ______ day of November, 2005.
|
Witness:
|
COMPREHENSIVE
HEALTHCARE SOLUTIONS, INC.
|
|
By:
_________________________________
|
|
|
Name:
_______________________________
|
|
|
______________________________
|
Title:
______________________________
|
NOTICE
OF
CONVERSION
(To
be
executed by the Registered Holder in order to convert the Note)
The
undersigned hereby elects to convert $_________ of the principal and $_________
of the interest due on the Note issued by COMPREHENSIVE HEALTHCARE SOLUTIONS,
INC. on _________________, 2005 into Shares of Common Stock of COMPREHENSIVE
HEALTHCARE SOLUTIONS, INC. (the "Borrower") according to the conditions set
forth in such Note, as of the date written below.
|
Date
of Conversion:
|
_________________________________
|
|
Conversion
Price:
|
_________________________________
|
|
Share
To Be Delivered:
|
_________________________________
|
|
Signature:
|
_________________________________
|
|
Print
Name:
|
_________________________________
|
|
Address:
|
_________________________________
_________________________________
_________________________________
|
